Wednesday, April 16, 2008

ebaY Strangles Sellers With PayPal

In Jul of 2002 prior to the ebaY acquisition of PayPal TAG wrote,

TAG predicts that once ebaY owns PayPal, ebaY will require all sellers who sell on ebaY must offer PayPal's payment services. Since ebaY has a virtual monopoly in the OAI/OTI, we feel this will be a disaster. ebaY will monopolize the auction and trading market and will now monopolize the online payment system. They will be able to increase prices at will (as they have done with their auction and trading services, despite quarter over quarter record breaking profits). Because of their dominance, they will be able to both require use of PayPal and be able to raise PayPal fees unrestrainedly. They could have attempted this with their own payment system, Billpoint, but TAG feels they would not have dared to do so because they would have had PayPal to contend with, as a lawsuit would have surely ensued. If ebaY owns PayPal, who will there be to challenge them?

This scenario is rapidly becoming a reality. In ebaY's bid to Amazonize ebaY, since Amazon is growing and ebaY isn't, ebaY is forcing more and more sellers to offer ebaY owned PayPal as a payment option. In an even more ominous move, ebaY is now planning on prohibiting ebaY Australia sellers from offering any payment option other than PayPal. The plan is that by 21 May 2008 all AU sellers must offer PayPal as an option, and by 17 June 2008 Australian sellers may only accept PayPal as payment.

ebaY of course, couches this as a "safety" issue, but there is no independent proof that PayPal is any safer than any other payment alternative. Of course if ebaY was as safe as they claim to be (one one hundredth of one percent has been their claim of fraud on their site), then the whole safety argument is moot before it even starts. So they are lying about one or the other as both can't be true.

ebaY said in their announcement, "...those using PayPal were almost four times less likely to have a dispute over their purchase than people who paid with bank deposit. Plus, PayPal sellers were almost half as likely to experience an unpaid item as sellers who did not accept PayPal." Of course the comparison to checks, money orders, cash, merchant accounts etc are not even considered. ebaY can claim whatever they like, but without outside independent audits and confirmation on all types of payment systems, all ebaY's claims are invalid.

You can read the entire announcement HERE or (just in case it is changed or disappeared) HERE ebaY has its plans and sellers have theirs. There has been an outcry of outrage amongst ebaY Australia sellers about this policy change (and the same outcry should resound around ALL ebaY sites, as what happens in Australia will be instituted wherever ebaY can get away with it). Sellers are suggesting real and specific ACTION (as opposed to feel good futile petitions and boycotts), asking other users to complain to the Australian Competition and Consumer Commission which can squelch this move (depending on how susceptible they are to ebaY's "lobbying"). Since ebaY has to apply to the ACCC, for approval, ebaY users can post their comments on ebaY's application Application Complaints and Comments Sellers are moving their auctions to other sites such as OZ Auction , their own websites, and also suggesting political action.

Some posts on ebaY's boards, give advice and provide links to act against ebaY AU. Act against ebaY AU
Changes announced on
sklhvo1758 (0 ) View Listings | Report 14-04-08 02:31 EST

From: lynne8670 (79 ) View Listings | Report
You've got to love Ebay(not) they make an announcement about changes 2mths out and they haven't even applied to the ACCC(which they have to do) so they can make the changes.

By making the announcement I'm sure Ebay thinks that all the complaints and anti Ebay sentiment will be over when they lodge their application with the ACCC and nobody will be bothered to comment on the application when it appears on the ACCC website asking for submissions, which forms part of the process by the ACCC for granting Ebay permission to make the changes.

The best way to stop these changes is to complain to the ACCC by phone or email and to watch the ACCC website for Ebays application and leave comments on that application and if the ACCC gets flooded with the same number or greater than have appeared in this forum then there may be a chance Ebay will be refused permission by the ACCC to implement the changes.

I like others will be leaving Ebay if the changes are made. As a buyer I Direct Bank Deposit for purchases in Aus as it is bad enough to have to wait up to 7days for delivery of purchases in Aus without having to wait an additional 5 to 7 days for funds to clear through Paypal, I only use Paypal for those rare occasions when I purchase overseas

FROM: the-bearoness (502 ) View Listings | Report
Here's a complaint already worded for those like myself who cannot think of the appropriate description of this new policy. [except naughty words ,that is ]

I can only give credit for this to an eBayer from Member to member help board that put it up the other day,thanks to you and sorry I've forgotten your user ID.

Okay guys,GO FOR IT!


I am filing a complaint over Ebay Australia's decision to restrict payment options and in doing so diminishing choices consumers have.

I believe that if Ebay takes the planned action this will constitute breaches of the Trade Practices ACT, PART IV--RESTRICTIVE TRADE PRACTICES , specifically s.45 & s. 4D.

In the whole, Australian buyers have a fear of handing over credit card details and bank details, which is the requirement when using paypal. There are also others that do not possess either and choose to send money orders.

These planned actions will significantly lessen choices consumers have in dealing with vendors on Ebay. Simultaneously it will force any sellers that do not currently accept paypal to do so or to close their operation on Ebay - essentially forcing them to breach s.45 of the TPA.

This is planned not to provide protection as they claim but to bolster their own bottom line.

There is no valid nor legal reason for Ebay to introduce this change as I currently have the choice to use paypal.

The ACCC has not acted against Ebay's carte blanche attitude in the past which has seen diminished competitiveness for Australians. I implore the ACCC to investigate and take the appropriate action. Signed by

henstoothbooks (4187 ) View Listings | Report 14-04-08 10:24 EST 4 of 15
ACCC is not the only the avenue to complain.

ASIC is also involved as PAYPAL owns an AFSL - This relates mostly to the delay of releasing funds etc however they are also concerned with consumer protection.

Complaints can be made at

gralbow (2399 ) View Listings | Report 14-04-08 10:56 EST 5 of 15
Chris Bowen - Member for Prospect
Assistant Treasurer
Federal Minister for Competition Policy and Consumer Affairs

Parliament House Office
Suite M1 24
Parliament House
Tel: 02 6277 7360
Fax: 02 6273 4125
Prospect Electoral Office:
115 The Crescent
Fairfield NSW 2165
Tel: (02) 9726 4100
Fax: (02) 9724 6115

Postal Address:
PO Box 802
Fairfield NSW 1860

ebaY needs to be pushed to the wall on this action. If they are legally a venue only, they should not be able to dictate to sellers what payment the seller can accept, as long as the payment method or provider is legal, and legitimate. This should be an issue that gets the attention of EVERY ebaY seller and buyer, no matter where the ebaY user is located or what ebaY site the seller or buyer utilizes. What happens on the ebaY AU and UK sites is bound to propagate to the other ebaY sites if ebaY can get away with it. What ebaY users should do NOW is contact consumer protection agencies, anti trust, and competitive governance agencies in their own countries, and pre-emptively ask the question about the legality of a similar move by ebaY in their own countries. In the US, ebaY users should contact their legislative representatives, the Dept of Justice and the Federal Trade Commission, and ask about what protections were put in place when ebaY was allowed to purchase PayPal, or request that some protections be enacted to prevent ebaY from implementing more restrictive trade practices, remove the ones already implemented, and continue to allow users choices in ebaY's virtual monopoly.

Other links of interest on this issue:

Aussies Flock to ebaY Rivals

Petition Against ebaY AU

US Dept Of Justice

Write to -

Federal Trade Commission Bureau of Competition

US House of Representatives - contact your Congressional Rep

US Senate - contact your Senator

Visit the TAG website